Describes investment facilities in common which are provided by government, company's income tax holiday of reduction, overview of company establishment and principle investment license in Investment Coordinating Board (Badan Koordinasi Penanaman Modal).

1. Law of Investment in Indonesia:
Investment Facilities in Common
Mariske Myeke Tampi

2. Figure 1.
Foreign Investment Flow (FDI) by region 2012-2014
(in billion dollars)
Developing Asia’s Countries Reached
The Highest Number of Foreign Investment Flow (FDI)
in 2012-2014

3. • Government is to provide facilities to any investors.
• Investment facilities set forth before may be given to
any investors that:
a. Expand its business; and
b. Make new investment.
Investment Facility

4. Investors receiving facilities set forth before shall be those
fulfil at least one of the following criteria:
a. To employ plenty of workers;
b. Belonging to high priority scale;
c. Belonging to infrastructure development;
d. Transferring technology;
e. Pioneering new industry;
f. Domiciling in remote area, deserted area, border area or any other area deemed
necessary;
g. Preserving the environment;
h. Conducting research, development and making innovation;
i. Making partnership with micro, small and medium-sized enterprises or
cooperatives; and
j. Using capital goods or machinery or equipment produced domestically.
Investment Facility

5. Facilities given to investors set forth before may be in
form of:
a. Net income tax deduction up to certain level of investment made within
certain perios.
b. Import duty holiday or reduction for imported capital goods, machinery
or equipment domestically unavailable for production;
c. Import duty holiday or reduction for raw materials or support materials
for production within certain period and with certain conditions;
d. Value added tax holiday or postponement for imported capital goods or
machinery of equipment domestically unavailable for production within
certain period;
e. Accelerated depreciation or amortisation; and
f. Property Tex reduction, especially for certain business fields in certain
region, area or zone.
Investment Facility

6. Company’s Income Tax Holiday of
Reduction
Company’s income tax holiday or reduction within
certain amount and period may be given to new
investment in any pioneering industries, that is, any
industries possessing extensive connections, providing
high value added and externalities, introducing new
technology and possessing strategic value for national
economy.

7. • Facilities set forth before will be given based on
national industrial policy issued by the goverment.
• Facilities set forth before do not apply to any foreign
investments that are not in form of limited liability
(establishment of limited liability in Indonesia is
based on Law Number 40 of 2007 concerning
Limited Liability)
Company’s Income Tax Holiday of
Reduction

11. Principle Investment License
http://www.bkpm.go.id/en/investment-step-by-step/principle-license

12. Business License
http://www.bkpm.go.id/en/investment-step-by-step/business-license

13. Success Story
http://www.bkpm.go.id/en/home-investment

14. Law Number 25 of 2007 concerning Investment
http://unctad-worldinvestmentforum.org/
http://www.bkpm.go.id
References